26 U.S.C. § 1211
Section 1211 · Limitation on capital losses
Amended 5 times on record
Applied in 113 court decisions — leading case Commissioner v. Clark (1989)
Most recently applied in Anderson v. Anderson (May 2023)
Cases citing this section usually also cite 26 U.S.C. § 165 · 26 U.S.C. § 1221 · 26 U.S.C. § 1212
How often courts cite this section
Court decisions citing this, by year.Markers show enactment, consequential amendments, and circuit splits over this section — watch for a citation surge after a change or a disagreement. The dip in the last several years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the most recent years, so recent citations are undercounted.
In the case of a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of gains from such sales or exchanges.
In the case of a taxpayer other than a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or exchanges, plus (if such losses exceed such gains) the lower of—
(1) $3,000 ($1,500 in the case of a married individual filing a separate return), or
(2) the excess of such losses over such gains.
Editorial notes U.S. Code · Office of the Law Revision Counsel
Amendments
1986—Subsec. (b). Pub. L. 99–514 amended subsec. (b) generally, substituting present provisions for provisions which had declared in: par. (1), general rule for limitation on capital losses for taxpayer other than corporation; in par. (2), meaning of term “applicable amount”; and in par. (3), rule relating to computation of taxable income.
1977—Subsec. (b)(1)(A). Pub. L. 95–30 inserted “reduced (but not below zero) by the zero bracket amount” after “taxable year”.
1976—Subsec. (b)(1)(B). Pub. L. 94–455, §1401(a), substituted “the applicable amount” for “$1,000”.
Subsec. (b)(2). Pub. L. 94–455, §1401(b), substituted provision relating to “applicable amount” for prior provision limiting amount of capital losses for married individuals and reading “In the case of a husband or wife who files a separate return, the amount specified in paragraph (1)(B) shall be $500 in lieu of $1,000.”
Subsec. (b)(3). Pub. L. 94–455, §501(b)(6), struck out last sentence “If the taxpayer elects to pay the optional tax imposed by section 3, ‘taxable income’ as used in this subsection shall read as ‘adjusted gross income’.”
1969—Subsec. (b). Pub. L. 91–172 provided for only 50 percent of an individual's long-term capital losses to be offset against his ordinary income up to the $1,000 limit although short-term capital losses continue to be fully deductible within the $1,000 limit and the deduction of capital losses against ordinary income for married persons filing separate returns to be limited to $500 for each spouse rather than the $1,000 formerly allowed.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 301(c) of Pub. L. 99–514, set out as a note under section 62 of this title.
Effective Date of 1977 Amendment
Amendment by Pub. L. 95–30 applicable to taxable years beginning after Dec. 31, 1976, see section 106(a) of Pub. L. 95–30, set out as a note under section 1 of this title.
Effective Date of 1976 Amendment
Amendment by section 501(b)(6) of Pub. L. 94–455 applicable to taxable years beginning after Dec. 31, 1975, see section 508 of Pub. L. 94–455, set out as a note under section 3 of this title.
Section 1401(c) of Pub. L. 94–455 provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1976.”
Effective Date of 1969 Amendment
Section 513(d) of Pub. L. 91–172 provided that: “The amendments made by this section [amending this section and sections 1212 and 1222 of this title] shall apply to taxable years beginning after December 31, 1969.”
Cross References
Capital losses—
Allowed to certain insurance companies, see section 832 of this title.
Deductible from gross income, see section 165 of this title.
Corporations improperly accumulating income, capital losses, see section 535 of this title.
Losses from compulsory or involuntary conversions, see section 1231 of this title.
Other terms relating to capital losses, see section 1222 of this title.